Trump could hit Davos like a bomb

Here’s a preview of Andrew’s column on Davos and Mr. Trump, assuming that the president will still leave Washington for the Swiss Alps:

It is both speed-dating at high altitude for the cognoscenti and a cerebral high-minded affair filled with panel conversations around issues such as gender diversity, harassment, artificial intelligence and the environment. The official theme this year is “Creating a shared future in a fractured world.”

All of which makes Mr. Trump the anti-Davos Man.

“Trump is as loathed by the elites of Western Europe as he is by the elites of Manhattan,” said Niall Ferguson, a senior fellow of the Hoover Institution, at Stanford University and a longtime Davos attendee who is taking this year off.

• Patrón is the premium tequila market leader with U.S. sales of $1.6 billion in 2016, according to Euromonitor, a market research firm.

Can you remember the last time stocks pulled back?

We here at DealBook will forgive if you don’t. It has been a long time.

With Monday’s close, the S&P 500 has now gone 395 sessions without a decline of 5% or more from a record high, MoneyBeat’s Ben Eisen reports. That’s the longest streak on record, surpassing the previous record of 394 trading days set in the mid-1990s.

So when was the last time the market fell 5 percent from a recent high? The aftermath of Brexit in June 2016.

Kate Kelly of NYT reports that six weeks after firing the former congressman Harold E. Ford Jr. for unspecified misconduct, Morgan Stanley has clarified that the misconduct was not sexual in nature.

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The statement is part of a legal settlement that Mr. Ford reached over the weekend with Morgan Stanley, according to a person who was briefed on the resolution but was not authorized to speak publicly. The broader contours of the settlement were unclear, including whether there was a financial component. Through a spokesman, Mr. Ford declined to comment.

Before his firing last month, Mr. Ford had spent seven years at Morgan Stanley recruiting clients. He joined the investment banking industry after losing a United States Senate race in Tennessee as the Democratic nominee in 2006.

Mr. Ford, 47, was fired after a female journalist told Morgan Stanley that he had harassed her at a dinner in 2014. At the time, Morgan Stanley said he had been fired “for conduct inconsistent with our values and in violation of our policies.” Some media reports of his firing said it had been triggered by the harassment allegation.

Dan Loeb keeps the pressure on Nestlé

Since Mr. Loeb’s Third Point emerged as an investor in the Swiss food giant, Nestlé has sold off its U.S. confectionary business, named new directors and bought Blue Bottle coffee.

All of those have been great moves, according to the hedge fund. But there’s more to be done, Third Point wrote in its latest letter to investors.

From the investor letter:

These actions are important steps in the right direction that make it clear that Nestlé is responding to calls for action. While we recognize that Nestlé has certain unique cultural and structural constraints, we hope now that Dr. Schneider has completed his first year and there is new blood on the Board, the company is able to move with greater alacrity.

What Third Point wants

• Better demonstrate that the company is focused on “nutrition, health and wellness,” with the implication being to divest products like ice cream and frozen pizza.

• Buy back more shares.

• Again consider selling the L’Oreal stake, something Nestlé has been loath to do historically.

— Michael J. de la Merced

Charles Kushner isn’t worried about Robert Mueller

The father of Jared Kushner, who is again working at the family real estate business — this time without a title — told the WaPo in an interview that the Kushner Companies hasn’t been a target of the Russia investigation so far and hasn’t had problems getting financing.

More from the article by Michael Kranish of the WaPo:

“All I know is that we are not at all concerned, and we are cooperating,” Kushner said in a half-hour interview at his headquarters at 666 Fifth Avenue. “And they can knock themselves out for the next 10 years reading those papers as far as I’m concerned.”

The elder Mr. Kushner also lamented the amount of criticism that his son, a senior presidential adviser, has taken:

“I try not to focus in my life on the haters but it’s just, I have never seen anything like this,” Kushner said.

— Michael J. de la Merced

A.I.G. becomes a big acquirer once again

The insurer’s $5.56 billion deal to acquire Validus Holdings signals that the company is increasingly looking outward, instead of inward, as it had done since its bailout during the global financial crisis. Validus is A.I.G.’s biggest acquisition by far over the past decade, according to Standard & Poor’s Global Market Intelligence.

The transaction is expected to bolster the A.I.G.’s general insurance business, by adding a reinsurance platform, an insurance-linked securities asset manager and “a meaningful presence” at the Lloyd’s of London marketplace.

Here’s what Brian Duperreault, A.I.G.’s chief executive, said:

“Validus is an excellent strategic fit for AIG, bringing new businesses and capabilities to our General Insurance operation, expanding the bench of our management team and deepening our underwriting expertise.”

Celgene continues its deal streak with Juno

In offering to buy the Juno shares that it doesn’t already own for about $9 billion, Celgene is adding a maker of blood disease treatments. Perhaps more notably, it shows that the biopharmaceutical company is still on the hunt for more acquisitions.

Remember that earlier this month, Celgene agreed to pay up to $7 billion for Impact Biomedicines, which also makes a treatment for a kind of blood cancer.

Celgene, which is based in Summit, N.J., already owns about 9.7 percent of Juno’s shares.

• Juno’s shares closed on Friday at $67.81, meaning the deal is at a 28 percent premium.

• The transaction is expected to close in the first quarter.

The advisers

For Celgene: JPMorgan and the law firms Proskauer Rose and Hogan Lovells

For Juno: Morgan Stanley and the law firm Skadden

— Chad Bray

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Zach Gibson for The New York Times

Why markets should worry about a long shutdown

From a recent note by analysts at Pantheon Macroeconomics:

We would be astonished if Congress could not cobble together a majority of the sane in order to prevent a default. But astonishment has been quite common in response to events over the past couple of years, so investors would be well-advised to rule out nothing, however outlandish.

• How Jared Kushner became a focal point for China’s diplomatic outreach to the U.S. — and stirred up the worries of U.S. officials. (New Yorker)

• Deutsche Bank has flagged bank accounts tied to the Kushner family for “suspicious transactions” and referred the matter to German authorities — and may send its information to Robert Mueller as well, according to Manager Magazin of Germany. (Manager, Mother Jones)

Corporate profits are shrinking. What gives?

The tax overhaul signed into law last month is muddying the fourth-quarter earnings picture.

Improving corporate profit have been a pillar of the current rally, and analysts have forecast robust earnings growth in the coming months as the global economy gained momentum.

Yet with 11 percent of S&P 500 companies having reported four-quarter results, profits have slipped 0.2 percent from a year ago. That’s well below the 10 percent analysts expected ahead of earnings season.

So what gives? The tax law.

Large financial firms, which have made up the bulk of companies reporting thus far, have taken big one-time, tax-related charges. Profits for financial firms in the S&P 500 fell $29.2 billion, or 57 percent. Citigroup accounted for 73 percent of that decline. John Butters, a senior earnings analyst at FactSet, writes:

“Prior to the earnings release, many analysts had not updated their EPS estimates to reflect the impact of the charge. However, since the majority of analysts covering Citigroup provide EPS estimates to FactSet on a GAAP basis, the tax charge was included in the actual EPS for comparison.”

Exclude Citi, and the earnings growth rate for the S&P 500 would improve to 7.9 percent from -0.2 percent.

Two points of note:

• “While some of the biggest banks are reporting fourth-quarter earnings hits stemming from the new tax law, they see rich benefits over the long term, including effective tax rates that are even lower than the new 21 percent corporate rate,” as NYT’s Jim Tankersley reported last week.

• As the fourth-quarter earnings growth rate has fallen over the last week for S&P 500 companies, profit expectations for 2018 have risen.

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Dado Ruvic/Reuters

Facebook isn’t certain it’s good for democracy

Facebook was originally designed to connect friends and family — and it has excelled at that. But as unprecedented numbers of people channel their political energy through this medium, it’s being used in unforeseen ways with societal repercussions that were never anticipated.

Mr. Chakrabarti added that while the company was slow to address Russian interference in the 2016 presidential election, it’s working to prevent it happening again.

Someone believes in Jes Staley

Tiger Global appears to back Mr. Staley’s view that the bank’s 40 percent discount to book value is unjustified after it recently completed its multiyear restructuring and sold off most of its African operation to address longstanding concerns about its capital levels.

Thousands of protestors went to the National Mall in Washington on the one-year anniversary of the Women’s March.Credit
Leah Millis/Reuters

Has #MeToo made inroads on Wall Street?

Omeed Malik, one of Bank of America’s top liaisons to the hedge fund world and a confidant of Jon Corzine, has left the firm after an internal investigation into a young female analyst’s accusation of inappropriate sexual conduct.

More from Jessica Silver-Greenberg and Matt Goldstein of the NYT:

Officials from human resources interviewed as many as a dozen people who have worked with Mr. Malik. He left roughly two weeks before annual bonuses were to be handed out.

• How to practice so-called gender-lens investing and support women in the workplace. (CNBC)

• The Sundance Film Festival, Harvey Weinstein’s old stomping ground, is now a showcase for women. (NYT)

• Representative Patrick Meehan, a Pennsylvania Republican who has taken a leading role in fighting sexual harassment in Congress, used taxpayer money to settle a misconduct complaint of his own. (NYT)

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An employee at a Bitmain facility in Inner Mongolia, one of the biggest Bitcoin farms in the world.Credit
Giulia Marchi for The New York Times

Can Bitcoin mining go green?

Right now, the computation to “produce” a new Bitcoin uses as much energy as an American household consumes in two years, according to analysts at Morgan Stanley and the economist Alex de Vries. Some in the virtual currency community are looking for ways to reduce that figure.

Here’s what Vitalik Buterin, the creator of Ethereum, told Nathaniel Popper of the NYT:

“I would personally feel very unhappy if my main contribution to the world was adding Cyprus’s worth of electricity consumption to global warming.”

Some, however, say an independent, decentralized monetary system is worth the cost.

The virtual currency flyaround

• Louis Dreyfus has teamed up with ING and ABN Amro of the Netherlands and Société Générale of France to create a blockchain platform for agricultural trading. (Bloomberg)